In this article we will explain a custom indicator for Metatrader 4, called Pattern Recognition Master, which detects different price patterns in charts automatically, which save time for the trader and eliminates the possibility of ignoring patterns or confuse one price pattern with other.
For many traders, the price action is the best indicator of current and future market behavior, and if you can read it properly, can serve to detect significant opportunities that could not be observed otherwise. The price action usually takes the form of chart patterns, some of which are easily identifiable and have high reliability, such as the bullish engulfing pattern, the bearish engulfing pattern and Dragonfly Doji. However, the identification of price patterns requires knowledge and practice, not all traders have the patience or the time to observe charts searching for patterns that enable them to identify new opportunities.
It is there that this indicator is particularly useful (similar to Candle-Star-C indicator). The indicator points out the candles on the chart with the names of the corresponding patterns (as Doji or Shooting Star) when applicable, ie when it finds a price formation. All the trader has to do is determine if the pattern found is bullish or bearish, check the general trend and decide what kind of action to take (we recommend using this tool with other indicators to confirm the signs). You can consult the list of Japanese candle patterns to find the pattern recognized by the indicator and the value of the signal it produces. This indicator is available for both Metatrader 4 and Metatrader 5.
Parameters and configuration of the indicator
The main parameters of this custom indicator are:
- Show_Alert (default = true) – When this parameter is set to “true”, displays alerts when certain pattern is detected in the price chart.
- UseExtraDigit (default = false) – This parameter is set to “true” if the broker uses an extra digit in quotes.
- Other parameters – The trader has the possibility to determine which price patterns can be shown or not in the chart. This is useful when the trader uses a trading system that depends on a single pattern and therefore he or she is only interested that the indicator points just to such price formation.
At this point it is important to note that this indicator only indicates the patterns. In this case the indicator display the symbols near the candles while the trader can see the legend for symbols in the upper left corner of the chart. In addition, the trader must know how these patterns work and when they involve signals to buy or to sell. For traders who base their strategies on Japanese candle patterns, this indicator can be a very useful tool.
You can download this indicator both for Metatrader 4 and Metatrader 5 using the following link:
You can access more free MT4 indicators in the following section: Free indicators for Metatrader